NEW INC. MAGAZINE COLUMN ON A.I. FROM HOWARD TULLMAN

 

Artificial Intelligence Embeds Across Sectors Without Heed to Its Human Impact 

AI is becoming a part of of our everyday lives, whether we like it or not. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JAN 28, 2025

Senior education officials, regulators, and media mavens all over the world have been focused for some time on the issue of how teachers will be able to distinguish between materials written by students and those created by technologies driven by artificial intelligence. Interestingly, the majority of educators who work in the field every day with students don’t think this is much of a concern. They know their students, they know their respective abilities and capacity, and frankly they only wish their students were smart, motivated and talented enough to try to accomplish such a feat of prevarication.  

Another interesting discussion is taking place in the work world. It’s everywhere. Consider the controversy from the movies, which are now all a twitter (no pun intended) about the AI-based voice enhancement technology used to improve the authenticity of the Hungarian voices in The Brutalist movie. Then there’s the magazine world: the not-too-distant but humiliating discovery in 2023 that articles in Sports Illustrated were actually AI-written and attributed to non-existent authors. Which, by the way, also had headshots. No one complained about the content of the stories, they were just apparently horrified by the process of computers replacing copywriters.

All these concerns stem from fears arising in two different areas. First, there is anxiety across industries about job elimination through automation and A.I. implementation. And, second, the increasingly prevalent idea that we are all less able to tell the difference in so many ways between men and machines.

Plenty has been written about job losses, but we’re just beginning to realize how exposed and how unaware we are of the extent to which our expanding and encroaching technologies have subtly and unobtrusively invaded and subsumed so many aspects of our day-to-day lives. One of the most simple and obvious examples is captchas. We now take for granted and unironically that it’s become our daily job to repeatedly prove to computers that we are real human beings before they permit us to get on with so many different activities and transactions. For the moment, it seems that we’re all stuck with technology, when all we really want is stuff that works.

Real-World Insight

The problem is that our technology development work is so completely focused on the future that we seldom, if ever, look backward. As a result, rather than learning from mistakes, we are doomed to keep repeating them and forgetting the lessons that we should have painfully learned by now. As a result, we quickly come to depend on these new modes of assistance and support. At the same time, we become fearful because we know that there are aspects of their operation and abilities that we can’t entirely control. I’m not talking about Skynet and Arnold. But some more subversive undertakings are superficially attractive, clearly less threatening at the moment. These are designed to replicate, impersonate, and deal directly with other machines and computers “as if” they were human.

With the announced and accelerating rollouts of agentic tech, I believe that we’re on the cusp of another deep technology rabbit hole which we’re largely unprepared for and ill-equipped to deal successfully with. What we never seem to appreciate is that when we develop new disruptive tools and technologies, we immediately seize on the initial implementations and put them into action before we remotely understand them in their entirety. Much less consider their unforeseen and consequential longer-term effects, or even appreciate how long and costly a process will be required to understand how to best put them to use. Every new technology is a package deal, which brings its own negativity right along with all its benefits.

The recent unveiling by OpenAI of its new agentic offering called Operator is the latest clear step forward, for better or for worse. Incorporating computer-using agency, along with the ability to interpret and act upon handwritten lists and other images, Operator – for all intents and purposes – looks to other computers like a human operator who is using both a keyboard and a mouse. Already connected to Open Table and Instacart among other apps and services, Operator can seamlessly book tables and reservations, order tickets, select groceries, and initiate regularly scheduled tasks with very limited, if any, human intervention once the process is set in motion. Only at the final moments and specifically when payment information and confirmation is required does the system pause and ask for approval before proceeding. It’s only a short further step to complete autonomy and reaching the point where, as the late great singer-songwriter Jim Croce sang in his version of his hit Operator, “There’s no one there I really wanted to talk to.”

AI Anxiety

If this prospect doesn’t recall the frightening scenes from Fantasia where the unstoppable brooms carrying buckets of water marched ceaselessly forward and step right over poor Mickey, the Sorcerer’s Apprentice, then you’re simply not old enough or a fan of classic Disney movies. Embedded in this fantasy is a real warning which has even more direct and important application today. It’s not difficult to imagine even more sophisticated and fully automated onslaughts launched against ticket sellers or new and more convincing scams and frauds using data and imagery extracted by these new tools.

A photo of a handwritten shopping list – as used in the Operator demo video – seems innocent and harmless until you realize that you’ve provided the digital world with the ability to readily replicate your cursive signature. This may matter less as we move forward, and the schools completely abandon any effort to teach our kids how to sign their names on documents or even write properly and settle instead for block printing.

Bottom line: Here we go again on a wild chase into the future without any clear end in sight or a sufficient understanding of the risks involved or how they might be limited or circumscribed. We’re buying the ticket, closing our eyes, and taking the ride. As the late Hunter Thompson used to say: “There is no honest way to describe the edge because the only people who really know where it is are the ones who have gone over.”

 

HOWARD TULLMAN JOINS LISA DENT TO TALK ABOUT INVESTING IN THE FUTURE

LISTEN TO THE SHOW HERE

 LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

The Lesson of SI's Epic Brand Failure

Once one of the most popular magazines in the country, the title's most recent troubles point to the perils of not investing in the future because the past was so great. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

While there's some modest prospect that Sports Illustrated will once again be resurrected from the shadows of its most recent fiasco -- most of its journalists were laid off -- it seems much more likely that we've seen the last vestiges of a brand-based venture that lost its heart and raison d'etre long ago. The title was essentially rented out by its owner, Authentic Brands Group, to be published by a company called Arena Group, which got caught grasping desperately at such solutions as AI-faked articles by invented authors. SI reached its peak circulation about 30 years ago and things have been headed downhill ever since. From weekly to monthly to nowhere.

Plenty of print periodicals have passed away and many others are circling the drain for obvious reasons, but the SI saga offers some specific lessons for new business builders that are especially instructive when you consider the power and presence of sports in our lives today. The primary lesson: regardless of how big the wave you're trying to ride, if you don't stay well ahead of the currents and rough waters, it's likely to roll right over you. And no amount of semi-naked, swim-suited models is gonna keep you or your business afloat.

If the cover of Rolling Stone was the golden ring for artists and bands in the rock business, then Sports Illustrated was the biblical equivalent for jocks in every sport.  And, truthfully, SI's powerful brand, slick photography, great writing, and its broad demographic reach was even more substantial than Jann Wenner's rag. And far more valued by mainstream advertisers. But time has a nasty way of turning your attributes into ashes if you don't keep moving forward. There were plenty of signals over the years, but they were largely ignored by SI's founding owner -- Time Inc. and later Time-Warner -- because, when you're successful in the moment and resting on your laurels, you forget quickly, and learn only slowly and painfully.    01:23

Here were the three major things that SI's owners and managers forgot.

(1)   Your Brand is Shorthand for a Promise.

That promise is to consistently deliver to your clients, customers, and the public a defined and readily understood level of performance, products, and services. A brand can mean new, fast, exclusive, or unique. But today, everything is everywhere, and no one wants to wait for anything, so the competitive stakes are radically different. The longer you've been around, the more concrete your brand promise, your commitments, and the crowd's expectations become; but, when the alternatives are just a click away, your fans' loyalty is fluid and flighty. If you drop the ball, the crowd is quick to move on. Try to do things on the cheap or in a half-assed manner, or the same old way, and they're gone. It's become a "what have you done for me lately" world.  Sports Illustrated used to be special, now it's "so what," too little, too late, and nobody cares.

(2)   Value is in the Eyes of the Beholder.

Most honest marketers will tell you that it's the crowd, and not you or your cronies, that keeps score these days and decides what's worthwhile and worth wanting. In an environment of rapid and rabid social media - where everyone's a broadcaster - the crowd controls your brand and your reputation. If you're lucky, you're still hanging on for dear life and trying to outlast the bumpy ride. Brands like SI, which were still stuck in the dark, pre-digital ages, thought that their historical brand equity was enough to allow them to command a premium price for their traditional, sleepy, and largely unchanged offerings. But the real world thinks otherwise. No one wants to pay up for old news. And honestly, no one wants to "Be Like Mike" anymore either. If you don't grow, they take the ball away and you have to go.

(3)   Nostalgia can be a Narcotic and Put You to Sleep.

It's easy and often a lot less painful to look backwards and focus on the glories of the past, but that's dangerous in times of rapid change. Celebrating "the way we never were" or constantly rehashing the old days allows us to embrace and be seduced by the illusion of permanence.  Saturday Night Live is a great example of the risks associated with trying to rebottle the old brews. Justin Timberlake's recent embarrassing appearance was a sad commentary on another show that's lost its relevance, and most of its audience, along with a guy trying to get back in the game whose talents are toast.

Over time, even the best brands and businesses can become static and inflexible as well as very difficult to extend to seize new opportunities. Tradition and "tried and true" rationales are too often convenient excuses for businesses that aren't interested in change or making critical and costly investments to upgrade, expand and improve their products.

Sports Illustrated may only be the latest casualty in a long list of brands and businesses overtaken by change and new technologies, which includes Kodak, Blackberry, AAA, and the entire Swiss watch industry. But it won't be the last. Time is ruthless. The message is clear: if you're not actively moving your business forward, you're losing ground and slipping backwards - whether you know it or not. As long as you act as if you're coming from behind, you have a shot at staying ahead.

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

The Real World is Bailing on Artificial Intelligence

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

Major non-tech public companies in the U.S. have pretty much squeezed all of the good news and PR juice possible out of the A.I. lemon. The end of the hoopla around large language models -- which we once called “vaporware” -- is drawing near.

Not surprisingly the Potemkin projects these businesses hastily erected as shiny facades to hide the sad reality that they actually had no clue about what was coming down the pipe and are already showing their age and their cracks. The recent Sports Illustrated debacle where fake articles created by A.I. were published under false names is a good example of pretenders getting ahead of the curve. None of these folks really had any business trying to get into this messy and complicated business. They also had no real desire to make the long-term and expensive investments required to seriously find out what was going on. Only the Magnificent Seven tech giants can actually afford to unreservedly pursue pipe dreams on this scale. The rest of these guys were mostly kidding themselves and trying to play catchup in terms of the market buzz.

The relatively prudent and financially responsible companies among them - notwithstanding their latest A.I. excesses - have for years been shortchanging R&D to bolster their bottom-line profits.  This is what you’d expect, especially when a new area of invention and innovation is outside of their alleged areas of expertise. The very best strategy they can muster is rarely substantive. It’s almost always about noise, free-riding, and jumping on the bandwagon whether they know where it's headed or not and doing it on the cheap to boot.

The current storm, which is rapidly abating, is just the latest case of believing that, if the story is big enough and the shouting is loud enough, the facts don’t matter. At the moment, they’re done fishing and starting to focus on cutting bait and bagging the whole show.

Expect that in the first quarter of this year we’ll see an unending parade of delays, deflections and dodges all designed to try to let the air out of this particular balloon before it completely pops. I always thought that some of the craziness around the diversity, equity and inclusion nonsense and the pronoun police would hit the skids before the big guys started to bail out of their A.I. misadventures. But it looks like we’ll be stuck with the politically correct know-it-alls for a while longer although certain DEI-cheerleading college presidents won’t be leading the charge. I guess the new rule these days - courtesy of the Orange Monster - is that you can lie as much as you want, as long as you can get away with it, and as long as you don’t come to believe your own lies.

This is not to say that every company won’t eventually benefit from the incorporation of these ideas and new technologies into the software, operating systems, and other productivity tools which they purchase and license from the tech giants. It’s just that all their creatively cosmetic attempts to do any of this magic themselves are already clearly doomed. Better than 90% of the businesses in the U.S. may never have any material uses or direct application for artificial intelligence in their shops. 

But that didn’t keep all the biggest non-tech players from dreaming up, staffing up, launching at great expense, and then hyping the daylights out of their own A.I. initiatives long before there was any demonstration of practical applications, productivity gains, or even validation of the accuracy of the underlying statements, which have regularly been shown to include what the industry politely calls “hallucinations.” In formulations and fantasies that Lewis Carroll would be proud of, the promoters like to suggest that what the systems say is very clear - what the verbiage means is up to you - and you’re invited to take and use it at your peril.

The biggest problem with these fantasies is that they never deliver the goods. Even the most industrious group of highly paid monkeys sitting in front of a bank of computers won’t write critical code that is worth anything if they have no idea of what they’re trying to do. Of course, the people charged with explaining to their finance teams and eventually to their investors (not to mention the about-to-be-unemployed team members) where these orphaned A.I. experiments and abandoned initiatives now stand have their hands full. Because there’s no amount of creative math sufficient to conceal the true costs of fake work.

You had hundreds of people charging full speed ahead in these companies under the delusion that effort alone (rather than vision or intelligence) was sufficient to create value. Now the marketing and PR efforts will turn to crafting convenient justifications and explanations - just as baseless and fantastical as the original story lines - to escape the thorny and inescapable truth that the money is gone, and they have nothing to show for it. Even ChatGPT has no answers for this mess. You can either have results, or excuses, but not both.

As all these companies begin to slow down and back away from their stalled and stale “projects”, I assume that they’ll be seizing upon a couple of obvious and easy explanations - as long as it doesn’t highlight their own ignorance. You can be sure that no one will ask why they didn’t think about these exposures before they rushed ahead.

We’ll hear about elaborate concerns over privacy and data. Angst about security and safety, especially in terms of other countries and bad actors. New issues regarding copyright laws and, of course, all the scams and frauds based on voice and video simulations. Measurement, validation and tracking problems will be highlighted as they all begin to worry anew about accountability. Keep in mind that these are the same folks spending billions in ad dollars for programmatic ad solutions where they have absolutely no idea of how the ads are being placed or their impact and effectiveness.  

The bottom line is pretty simple and two lessons to keep in mind as the new year begins. You can’t go wrong by sticking to your knitting and focusing on doing a better job on the things you know how to do. And don’t try to do complicated things cheaply that you shouldn’t do at all.

JAN 9, 2024

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.